Erica Virtue, Staff Reporter
FINSAC may not be able to recover millions of dollars in debt, racked up by the manufacturing sector, as documents to substantiate some loans have disappeared from lending institutions.
The Sunday Gleaner understands that there are 80 companies and individuals, listed on a register of cases being assessed by a special committee (Oversight Committee) set up by FINSAC more than a year ago, to assess and rehabilitate businesses considered viable. However, in at least one case, documents to substantiate loans have disappeared, effectively preventing FINSAC and the committee from recovering the money owed.
In an effort to streamline its 14,000 debtors, FINSAC has segmented the debts into different categories. Those in the manufacturing companies sector was sent to the Oversight Committee, chaired by Beverley Lopez, president of the Jamaica Exporters Association (JEA).
The Sunday Gleaner questioned her last week, about the instances of the disappearing documents. She said that the case mentioned by The Sunday Gleaner, was not the only one of its kind, but she declined further comments. She added, however, that in some instances, the debt recorded was dismissed as incorrect by the debtors.
The register shows that individuals who claimed to have operated and provided agricultural, manufacturing, entertainment, tourism and other services have left a trail of bad debt totalling $16 billion.
The Sunday Gleaner has secured a copy of the register of cases in the manufacturing sector which was sent to the Oversight Committee. It listed companies and indebted individuals, the sector in which the businesses operated, the total debt, and the remarks/status up to the time it was passed to the committee. The document shows that the debtors owe sums ranging from a low of $250,000 to a high of $616 million, with three companies having debts in excess of half-a-billion dollars each.
In one instance, the register cites a debtor as owing $85 million. The company was listed as a farm, but the debtor/company said he had no debt with FINSAC. FINSAC is unable to file a suit, because there is no documentation in place. Documents on the status of the loans have disappeared from the lending institution.
Mrs. Lopez said her committee has submitted its final report to Finance Minister Dr. Omar Davies, but declined to say when it was sent.
"I am not about to give you the information as to when the final report was sent," she told The Sunday Gleaner last week. "I am just saying that one was sent."
She also declined to comment on the number of cases her committee received.
But according to her, the Oversight Committee's ability to make a better contribution was hampered by lack of documentation, disinterest and refusal of debtors to disclose information.
"But we were able to rehabilitate a few. I am not saying I am happy about the number, but we were able to get some back on their feet again," she said.
Highly placed sources have told The Sunday Gleaner that there are instances when banks loaned millions of dollars to persons with no collateral, and default on loans means there is nothing to claim.
"It is only another word for having an orgy with people's money. Banks have taken people's money, lent it to their friends, in some instances with no collateral, then they turn around and terrorise a little man who borrows $20,000," the source said.
The committee's remarks against some debtors indicate that some are paying back the agreed monthly payments, on time, some are defaulting on payments, some are not paying a cent, while others are seeking a further bail-out.
Discussions were said to be under way with some companies, which have sent proposals for refinancing. Some of the proposals are being studied, while demands for payment have been made in others. Some companies/businesses, although auctioned, have had no bidders.
Meanwhile, the National Investment Bank of Jamaica (NIBJ) is said to be providing assistance to some companies with a view to offering a further bail-out. FINSAC's remarks with respect to one company with an $86 million debt, is that "NIBJ is reviewing prior indication of inability to help."
Last week, when asked, the NIBJ denied making any commitment to the company which was named by The Sunday Gleaner.
A response from Public Relations Officer Claudette White said the NIBJ had never invested in the company and is not considering a proposal to do so now. Responding to the question of whether the NIBJ was about to bail out any other company, Ms. White's response was: "The bank is contemplating a proposal to assist some companies in which it has invested, and which are also indebted to FINSAC. We are assisting these companies in their negotiations with FINSAC and the criteria on which any further assistance will be extended are still being finalised."
Recently, FINSAC's move to sell its bad debt portfolio to a third party was blocked by a ruling from the Supreme Court. Four debtors asked the Supreme Court for an interim injunction to bar FINSAC from transferring the portfolio.
One of the debtors, the principals of Pamaco, which according to the document secured by The Sunday Gleaner owes money in the region of $38.54 million, was one of the applicants. A stay was granted for the next 14 days to allow a judicial review.
There was no response last week to Sunday Gleaner queries from FINSAC's head Patrick Hylton and the Finance Ministry about the status of the cases to the Oversight Committee.
